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PART 1U.K.Introductory

Citation and commencementU.K.

1.  These Regulations may be cited as the Child Trust Funds Regulations 2004 and shall come into force for the purposes of—

(a)issuing vouchers (see regulation 3),

(b)completing account-opening formalities (see regulation 5),

(c)applications under regulation 13 to open an account with effect from the appointed day,

(d)applications under regulation 14 to be approved as an account provider to manage accounts from the appointed day,

(e)regulation 17, so far as it relates to applications referred to in paragraph (d), and

(f)making a fortnightly claim and financial return (see regulation 30),

on 1st January 2005, and for all other purposes on the appointed day.

InterpretationU.K.

2.—(1) In these Regulations—

(a)the following expressions have the meanings given in the Child Trust Funds Act 2004 (“the Act”)—

“child”

“child trust fund”

“eligible child”

[F1“the income threshold” (see section 9(6) of the Act)]

“Inland Revenue”

“Inland Revenue contributions” (see section 11(2) of the Act),

“parental responsibility” (see section 3(9) of the Act);

[F1“the relevant income” (see section 9(6) of the Act)]

“relevant person” (see section 15(2) of the Act),

[F1“relevant social security benefit” (see section 9(6) of the Act)]

“responsible person”, in relation to a child under 16 (see section 3(8) of the Act),

[F1“tax year” (see section 9(6) of the Act)]

“the person entitled to child benefit in respect of the child” (see section 2(1)(a), (4) and (6) of the Act);

(b)except where the context otherwise requires—

“account” means a scheme of investment which (except in regulation 22(1)) qualifies as a child trust fund, other than in the cases of—

(i)an account with a deposit-taker,

(ii)a share or deposit account with a building society, or

(iii)a deposit account with a person falling within section 840A(1)(b) of the Taxes Act M1, or a relevant European institution;

(2) The table below indexes other definitions in these Regulations—

Term definedRegulation
“the applicant”5
“the commencement date”7(8)
“description” of an account4
“the disqualifying circumstances”16
“first return period”30(1)
“fortnightly period”30(1)
“initial contribution”7(1)
“interim tax claim”26(2)
“local authority”33(1)
“looked after child”33(1)
“management agreement”5
“the named child”5 and 8(1)
“qualifying circumstances”14
“qualifying investments for an account”12
“registered contact”8(1)(d)
“second return period”30(1)
“special contribution”7(1)
“subscription year”9(2)
“supplementary contribution”7(5)
“the termination event”12(12)
“the transfer instructions”8(2)(h)
“the internal transfer instructions”8(2)(i)

Textual Amendments

F1Words in reg. 2(1)(a) added (with effect in accordance with reg. 1(2) of the amending S.I.) by The Child Trust Funds (Amendment) Regulations 2009 (S.I. 2009/475), regs. 1(1), 3

Marginal Citations

M11988 c. 1; section 840A was inserted by paragraph 1(1) of Schedule 37 to the Finance Act 1996 (c. 8).

M2O.J. L345, 19.12.2002, p. 1.

M4Number 17 of 1989.

M7O.J. L271, 9.10.2002, p. 16.

M9O.J. No. L1, 3.1.94, pp. 3 and 572.

M16O.J. No. L375, 31.12.1985, pp. 3–18, amended by Council Directive 88/220/EC (O.J. No. L100, 19.04.1988, pp. 31–32).

VouchersU.K.

3.—(1) The voucher to be issued under section 5(1) of the Act shall contain the following particulars—

(a)the full name of the child,

(b)his date of birth,

(c)his unique reference number,

(d)the expiry date of the voucher, and

(e)the amount of the initial contribution (see regulation 7(1)),

and a statement that the voucher cannot be exchanged for money.

(2) The voucher shall be sent to the person who is entitled to child benefit in respect of the child (or, in the case of a child who is an eligible child because of section 2(3) of the Act, to a responsible person in relation to the child) by post.

(3) The expiry date F7... shall be whichever is the earlier of—

(a)the date 12 months from the date of issue of the voucher, or

(b)where the child is over 17 years of age, the date on which he will attain the age of 18 years.

Textual Amendments

F7Words in reg. 3(3) omitted (7.2.2006) by virtue of The Child Trust Funds (Amendment) Regulations 2006 (S.I. 2006/199), regs. 1, 3

Descriptions of accountsU.K.

4.—(1) An account may be of either of the following descriptions—

Stakeholder account

Where the account meets the characteristics and conditions in the Schedule to these Regulations.

Non-stakeholder account

Where any of those characteristics or conditions is not met.

(2) Accounts opened by the Inland Revenue (see regulation 6) must be stakeholder accounts.

Opening of account by responsible person or the childU.K.

5.—(1) For the purposes of these Regulations, subject to [F8paragraphs (1A) and (2)], an account is opened for a child (“the named child”) with an account provider on the date the last of the following conditions is satisfied (in any order) where “the applicant” means—

(a)if the named child is 16 or over, the child; and

(b)in any other case, a responsible person in relation to the named child:

Condition 1

The applicant gives the voucher relating to the named child to the account provider [F9not later than 7 days after its expiry date] [F10or, where the account provider has chosen to open accounts without sight of the relevant voucher, the applicant gives the following information to the account provider:

(a)the expiry date of the voucher,

(b)the amount of the initial contribution as specified on the voucher, and

(c)where the date of birth shown on the voucher differs from the actual date of birth of the child (see regulation 13(5)(c)), the date of birth shown on the voucher].

Condition 2

The applicant enters into an agreement with the account provider (the “management agreement”) for the management of the account (see regulation 8(1) and (2)), which includes the application and declaration required by regulation 13.

Condition 3

Where that application is not in writing the applicant has agreed, or is treated as having agreed, the contents of the copy of the declaration required by regulation 13(3).

Condition 4

(a)In any case where the management agreement is a distance contract, the agreement must be an initial service agreement for the purposes of the Distance Marketing Directive M17, and contain the instructions required by regulation 8(1)(f), and

(b)in every case where there is any right to cancel (or automatic cancellation of) the management agreement, the period during which it may be exercised or occur has expired without that right being exercised or cancellation occurring.

[F11(1A) The application to open the account must be made, and Condition 2 satisfied, not later than the expiry date of the voucher.]

(2) An account must satisfy the requirements that—

(a)no subscription to the account is accepted by the account provider until the account has been opened in accordance with paragraph (1); and

(b)where the account is so opened before the appointed day, it shall not be treated as open for the purpose of accepting subscriptions until the appointed day.

Textual Amendments

F10Words in reg. 5(1) added (with effect in accordance with reg. 1(2) of the amending S.I.) by The Child Trust Funds (Amendment No. 2) Regulations 2009 (S.I. 2009/694), regs. 1(1), 3

Marginal Citations

M17O.J. L271, 9.10.2002, p. 16.

Opening of account by Inland Revenue—(Revenue allocated accounts)U.K.

6.—(1) The Board shall apply to open an account for a child to whom section 6 of the Act applies, by forwarding to an account provider the particulars which would be required for a voucher (see regulation 3), but omitting paragraph (1)(d) of that regulation.

(2) The account provider shall immediately open a stakeholder account in the name of the child, which shall have the same effect as if a responsible person for the child (or the child if aged 16 or over) had entered into the account provider’s standard management agreement for the stakeholder account in question, including the terms mentioned in Condition 2 of regulation 5(1) (but treating the reference to the application and declaration required by regulation 13 as a reference to the authorisation required by regulation 13(4)) and regulation 8(1)(f).

(3) The Inland Revenue shall maintain (and update from time to time) a list of account providers who have agreed to accept Revenue allocated accounts under this regulation, in the order of the date of their agreement, and the account provider shall be selected in rotation from the current list.

(4) Where the account provider offers two or more types of stakeholder account

[F12(a)the account provider shall select the type or types to be used for the purposes of this regulation (subject to sub-paragraph (b)),

(b)any type selected must be offered to the general public at the time of opening a Revenue allocated account of that type, and

(c)if more than one type has been selected, the account to be opened shall be chosen by the account provider in rotation between the selected types of accounts.]

[F13(5) The Inland Revenue shall write to the person who is entitled to child benefit in respect of the child (or, in the case of a child who is an eligible child because of section 2(3) of the Act, to a responsible person in relation to the child) to inform them of the opening of the account and particulars of it.]

Textual Amendments

Government contributionsU.K.

7.—(1) The amounts of the contribution for the purposes of section 8(1) of the Act are set out in paragraphs (2) to (4), (the amounts set out in paragraphs (2) and (4)(a) to be known as the “initial contribution”, and the amounts set out in paragraphs (3) and (4)(b) as the “special contribution”).

(2) Where the child is an eligible child on the appointed day by virtue of section 2(1)(a) of the Act (by reason of a child benefit award), and—

(i)was born after 31st August 2002 but before 6th April 2003, the amount is £277,

(ii)was born between 6th April 2003 and 5th April 2004, the amount is £268, and

(iii)was born between 6th April 2004 and the day preceding the appointed day, the amount is £256.

(3) Where the child is an eligible child on the appointed day by virtue of section 2(1)(b) of the Act (by reason of being a child in the care of a local authority at that date) and—

(i)was born after 31st August 2002 but before 6th April 2003, the amount is £554,

(ii)was born between 6th April 2003 and 5th April 2004, the amount is £536, and

(iii)was born between 6th April 2004 and the day preceding the appointed day, the amount is £512.

(4) Where the child [F14becomes an eligible child] on or after the appointed day and—

(a)is first an eligible child by virtue of section 2(1)(a) of the Act, the amount is £250, and

(b)is first an eligible child by virtue of section 2(1)(b) of the Act, the amount is £500.

(5) The amounts of the supplementary contribution for the purposes of section 9(2) of the Act (to be known as the “supplementary contribution”) are set out in paragraphs (6) and (7).

(6) Where the child is an eligible child on the appointed day (and is a child to whom section 9 of the Act applies), the amount—

(a)if the commencement date was after 31st August 2002 but before 6th April 2003, is £266,

(b)if the commencement date was between 6th April 2003 and 5th April 2004, is £258,

(c)if the commencement date was between 6th April 2004 and the appointed day, is £250.

(7) Where the child becomes an eligible child after the appointed day (and is a child to whom section 9 of the Act applies), the amount is £250.

(8) The “commencement date”, in relation to a child, means the first day for which child benefit was paid (under a decision mentioned in section 2(6) of the Act) in respect of the child, except that—

(a)where entitlement to child benefit is wholly excluded by a directly applicable Community provision, it means the date on which that exclusion took effect, and

(b)where the child was prevented from being an eligible child by virtue of section 2(5) of the Act, it means the date on which the child became an eligible child.

[F15(9) The Inland Revenue shall, following final determination of entitlement to child tax credit, write to the person who is entitled to child benefit in respect of the child (or, in the case of a child who is an eligible child because of section 2(3) of the Act, to a responsible person in relation to the child) to inform them that the supplementary contribution is being paid into the child’s account.]

[F16(10) A further contribution under section 10 of the Act of £250 is due for any child where—

(a)the commencement date (for child benefit: see paragraph (8)) in relation to that child is after 5th April 2005, and

(b)income support or income-based jobseeker’s allowance was paid for that commencement date to a person whose applicable amount included an amount in respect of the child.

[F17(10A) A further contribution under section 10 of the Act of £250 is due for any child if—

(a)an account is held by the child,

(b)the child was first an eligible child by virtue of section 2(1)(a) of the Act,

(c)section 9 of the Act does not apply to the child,

(d)a contribution is not, and has not been, due for the child under paragraph (10),

(e)the child is an eligible child on the day identified under the provisions of paragraph (10B) or (10C) as the case may be, and

(f)the condition in paragraph (10B) or (10C) is satisfied in relation to the child.

(10B) The condition in this paragraph is that it has been determined in accordance with the provision made by and by virtue of sections 18 to 21 of the Tax Credits Act 2002—

(a)that a person was, or persons were, entitled to child tax credit in respect of the child for any day falling—

(i)after the commencement date, but

(ii)not later than three months immediately preceding the expiry date of the voucher for the child (see regulation 3), and

(b)that either the relevant income of the person or persons for the tax year in which that day fell does not exceed the income threshold or the person, or either of those persons, was entitled to a relevant social security benefit for that day,

and that determination has not been overturned.

(10C) The condition in this paragraph is that income support, or income-based jobseeker’s allowance, was paid for any day falling—

(a)after the commencement date, but

(b)not later than one month immediately preceding the expiry date of the voucher for the child (see regulation 3),

to a person whose applicable amount included an amount in respect of the child.]

(11) On receipt of the further contribution [F18mentioned in paragraph (10) or (10A)] from the Inland Revenue the account provider must credit the account held by the child with the amount of the payment.]

Textual Amendments

F17Reg. 7(10A)-(10C) inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Child Trust Funds (Amendment) Regulations 2009 (S.I. 2009/475), regs. 1(1), 4(a)

F18Words in reg. 7(11) inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Child Trust Funds (Amendment) Regulations 2009 (S.I. 2009/475), regs. 1(1), 4(b)

[F19Age 7 paymentsU.K.

7A.—(1) A further contribution under section 10 of the Act is due for any child who is an eligible child on his or her seventh birthday, in accordance with paragraphs (2) to (5).

(2) Where the child is an eligible child on his or her seventh birthday by virtue of—

(a)section 2(1)(b) of the Act (child benefit entitlement excluded by reason of being a child in care on that date), or

(b)section 2(1)(a) of the Act (child benefit entitlement), but is also a looked after child or looked after and accommodated child within the meanings of those expressions in regulation 33, on that date,

the amount is £500.

(3) Where the child is an eligible child on his or her seventh birthday by virtue of section 2(1)(a) of the Act (by reason of a person being entitled to child benefit in respect of the child on that date) and does not fall within the terms of paragraph (2), the amount is £250 and, if the condition in paragraph (4) or (5) is satisfied in relation to the child, the further amount of £250.

(4) The condition in this paragraph is that it has been determined in accordance with the provision made by and by virtue of sections 18 to 21 of the Tax Credits Act 2002—

(a)that a person was, or persons were, entitled to child tax credit in respect of the child for any date (“the CTC date”) falling within the same tax year as the child’s seventh birthday, and

(b)that either the relevant income of the person or persons for the tax year in which the CTC date fell does not exceed the income threshold or the person, or either of those persons, was entitled to a relevant social security benefit for the CTC date,

and that determination has not been overturned.

(5) ) The condition in this paragraph is that income support, or income-based jobseeker’s allowance, was paid for any date falling within the same tax year as the child’s seventh birthday to a person whose applicable amount included an amount in respect of the child.

(6) On receipt of the further contribution from Her Majesty’s Revenue and Customs the account provider must credit the account held by the child with the amount of the payment.]

Textual Amendments